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Marriage affects your finances in many ways, including your ability to build wealth, plan for retirement, plan your estate, and capitalize on tax and insurance-related benefits. There are, however, two important caveats. First, same-sex marriages are recognized for federal income and estate tax reporting purposes. However, each state determines its own rules for state taxes, inheritance rights, and probate, so the legal standing of same-sex couples in financial planning issues may still vary from state to state. Second, a prenuptial agreement, a legal document, can permit a couple to keep their finances separate, protect each other from debts, and take other actions that could limit the rights of either partner.

Building Wealth

If both you and your spouse are employed, two salaries can be a considerable benefit in building long-term wealth. For example, if both of you have access to employer-sponsored retirement plans and each contributes $18,000 a year, as a couple you are contributing $36,000, twice the maximum annual contribution for an individual ($18,000 for 2015). Similarly, a working couple may be able to pay a mortgage more easily than a single person can, which could make it possible for a couple to apply a portion of their combined paychecks for family savings or investments.

Retirement Benefits

Some (but not all) pensions provide benefits to widows or widowers following a pensioner’s death. When participating in an employer-sponsored retirement plan, married workers are required to name their spouse as beneficiary unless the spouse waives this right in writing. Qualifying widows or widowers may collect Social Security benefits up to a maximum of 50% of the benefit earned by a deceased spouse.

Estate Planning

Married couples may transfer real estate and personal property to a surviving spouse with no federal gift or estate tax consequences until the survivor dies. But surviving spouses do not automatically inherit all assets. Couples who desire to structure their estates in such a way that each spouse is the sole beneficiary of the other need to create wills or other estate planning documents to ensure that their wishes are realized. In the absence of a will, state laws governing disposition of an estate take effect. Also, certain types of trusts, such as QTIP trusts and marital deduction trusts, are restricted to married couples.

Tax Planning

When filing federal income taxes, filing jointly may result in lower tax payments when compared with filing separately.

Debt Management

In certain circumstances, creditors may be able to attach marital or community property to satisfy the debts of one spouse. Couples wishing to guard against this practice may do so with a prenuptial agreement.

Family Matters

Marriage may enhance a partner’s ability to collect financial support, such as alimony, should the relationship dissolve. Although single people do adopt, many adoption agencies show preference for households that include a marital relationship.

The opportunity to go through life with a loving partner may be the greatest benefit of a successful marriage. That said, there are financial and legal benefits that you may want to explore with your beloved before tying the knot.

If you would like to discuss financial planning related to your upcoming or existing marriage or any other investment portfolio management matters, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fee-only fiduciary financial planning firm that always puts your interests first. If you are not a client yet, an initial consultation is complimentary and there is never any pressure or hidden sales pitch.

The answer is simple: enough to ensure that if you (or a covered family member) get sick or injured, you’re not footing the entire medical bill on your own.

If you receive health insurance through your employer, your choices are limited. Some employers will offer plans from multiple health insurance providers, but most limit their offerings to one provider. Additionally, most employers offer one or more of the following: an HMO, a PPO or a traditional plan.

• An HMO (or health maintenance organization) is usually the lowest-cost alternative. As a result, enrollees are limited to doctors and treatment facilities within a limited “network.” These plans usually have no deductibles. Enrollees are required to make copayments when seeing a physician.
• A PPO (or preferred provider organization) allows enrollees greater flexibility. Enrollees can see doctors in or out of the PPO’s established network of providers. Deductibles usually apply and co-payments are required. A visit to an out-of-network doctor will trigger an additional charge.
• A traditional indemnity plan is usually the most expensive, as it typically gives enrollees the greatest number of choices in choosing doctors and facilities. But the deductibles can be high and the insurance company may cap the amount of money it will spend on the enrollee’s behalf over his/her lifetime.

Choices for the Self-Employed

If you are self-employed, you can comparison shop among the insurance providers licensed to do business in your state. It is a good idea to get as many estimates as you can because coverage and premiums vary significantly. Be sure you are comparing apples to apples: You want cost breakdowns for coverage with similar deductibles, copayments, prescription benefits, and physician access.

Beyond Standard Insurance

As you can see, even the best plan probably won’t provide 100% coverage for you or your family. If your employer allows, you can also fund a flexible spending account (FSA) or health savings account (HSA). An FSA, which is an employee benefit typically funded through payroll deduction, allows you to set aside pre-tax dollars to use toward copayments, out-of-network coverage, or other medical expenses. The drawbacks of an FSA: The maximum you can contribute is low and any funds not used during a calendar year are forfeited. An HSA, available to those enrolled in a high-deductible plan, has a higher annual contribution limit and no “use-it-or-lose-it” rules.

If you feel you need more coverage and can afford it, you can also buy supplemental health insurance. The three most common types are disease specific, accidental death or dismemberment, and hospital indemnity. Again, be sure to comparison shop before purchasing.

If you would like to discuss your health insurance or any financial planning matters, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fee-only fiduciary financial planning firm that always puts your interests first. If you are not a client yet, an initial consultation is complimentary and there is never any pressure or hidden sales pitch.

You’ve almost certainly read about the recent drop in the global (and U.S.) stock markets, as a result of the “shocking” announcement by the Swiss central banking authority that it would not force the Swiss franc to trade at 1.2 euros. Be prepared to be shocked: you can now buy a Swiss franc with a euro.

If you’re like most of us, you’ve probably wondered why this shocking development would have anything to do with the enterprise value of the individual companies that make up the various global indices. What’s the story here?

The story is actually pretty simple—and surprisingly, isn’t being told very clearly in the press. The Swiss National Bank had been artificially holding the Swiss franc at 1.2 euros for the past three years. Why? Because the value of the euro has been sinking on global markets. A lower euro means everything manufactured in the Eurozone is less expensive for outside buyers, which is great for exports. By keeping the franc at a steady cost vs. the euro, the Swiss National Bank was protecting Swiss watches, chocolate products and high-end medical diagnostic equipment from becoming more expensive in the countries where Switzerland does most of its export business.

This policy suddenly became more difficult, in part because the European Central bank is expected to announce, on Thursday January 22, what economists delicately call “monetary easing”—buying government bonds, lowering interest rates, and giving banks and corporations more access to more euros. The inevitable result would be a lower euro compared to other currencies. Every time the Swiss Central Bank buys euros and sells francs, it is putting money in the pockets of global currency traders and a variety of hot money speculators who have bet that the Swiss will continue their policy. These traders would have reaped a huge windfall if the euro dropped and the bank continued to fight an increasingly expensive battle to maintain parity. The effect would have been a transfer of billions of dollars from Swiss taxpayers to shady speculators.

But why does any of this affect the value of U.S. stocks, or stocks in Europe, for that matter? Why were floor traders on the New York Stock Exchange experiencing what one described as ‘once-in-a-career’ market turbulence, and others described as a ‘massive flight to safety?’ Certain exporting companies in Switzerland will be negatively affected and have to adjust their profit margins downward to stay competitive. But U.S. companies aren’t selling their goods and services abroad in Swiss francs, and European companies will be slightly more competitive, globally, after the expected monetary easing announcement.

The only answer that makes any sense is that hot money traders dislike any kind of surprises, and they hit the “sell” button whenever they’re startled by news that they didn’t anticipate. Then they wait until they have a better understanding of what’s going on. And, since these short-term traders make up a majority of all the actual buys and sells, the markets tend to trade lower even though no fundamental economic reason exists for them to.

This provides a great opportunity for all of us to see the difference between short-term headline moves in the market and long-term fundamental shifts. Make a note to, a month from now, see if you still remember the fact that the Swiss central bank is no longer supporting the franc against the euro. At the same time, look to see if any major shift has occurred in the business operations or profitability of U.S. companies due to this adjustment in currency values overseas.

There will be known and unknown consequences as a result of this action. Other countries may decide to manipulate their currencies as well. Over the coming months, you might have to pay a little more for a Swiss watch, and chocolate manufactured in Switzerland might be pricier as well. You will want to steer clear of parking your money in the Swiss central banking system, which is now paying an interest rate of negative three quarters of a percent. If you’re a global options trader who took the wrong side of the bet, this was terrible news for your returns this year. But the underlying value of the stocks in a diversified investment portfolio aren’t likely to become less valuable based on the latest trading price of options denominated in Swiss francs.

If you would like to discuss your portfolio or any financial planning matters, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fee-only fiduciary financial planning firm that always puts your interests first. If you are not a client yet, an initial consultation is complimentary and there is never any pressure or hidden sales pitch.

We’re hearing a lot more about identity theft these days—from hackers stealing credit card numbers from big banks and retail stores to individuals opening up credit card or bank accounts in your name, which they can use to write bad checks or make expensive purchases. Criminal identity thieves may also take out a loan in your name for a car or even a house, and some have managed to receive Social Security benefits or tax refunds that rightfully belong to others.

In some cases, when arrested for some other crime, hackers have helpfully provided a victim’s name to the arresting officers, showing the police a falsified driver’s license with that person’s number and their picture. They post bail and skip town. When their victim doesn’t show up for a court date he was never informed of, he could be arrested.

How do you protect yourself?

According to the National Crime Prevention Council, the biggest threats are coming from places that might surprise you. A study by Javelin Strategy and Research found that most identity thefts were taking place offline, where someone managed to steal your credit cards, or found social security information or credit card information in a dumpster, or filed bogus change of address forms to divert a victim’s mail to their address, where they can gather personal and financial data at their leisure. Even more surprising, 43% of all identity thefts were committed by someone the victim knows.

An organization called IdentityTheft.net estimates that over 10 million people are victimized by identity theft each year, although that number may be boosted by the aforementioned mass hacking incidents. The Council and IdentityTheft.net say that you do a reasonable job of protecting yourself by taking a few common sense steps that make it much harder for someone to make purchases in your name or withdraw funds from your accounts:

• Never give out your Social Security number, and don’t carry your social security card, birth certificate or passport around with you.
• Copy your credit cards and your driver’s license, and put the data in a safe place, to ensure you have the numbers if you need to call the companies.
• When you use a credit card to buy something in a retail store, take the extra copy of the receipt with you and shred it.
• Create complicated passwords for your online bank and investment accounts, and don’t write them down on hard copy paper. Try not to use the same password for every website you access. (Can’t remember 50 complicated passwords? A free program called LastPass lets you save all your user names and passwords in an encrypted format, so you only have to remember a single strong pass phrase. You can also store security questions and answers.)
• Don’t let anyone look over your shoulder when you’re using an ATM machine.
• Be skeptical of websites that offer prizes or giveaways.
• Tell your children never to give out their address, telephone number, password, school name or any other personal information.
• Make sure you have a virus and spyware protection program on your computer, and keep it updated.
• Check your account balances regularly to make sure no unexplained transactions have occurred.

These simple precautions will keep you safe from many of the criminal efforts to hack into your life. If you feel like you need additional protection, there are a variety of protection services on the marketplace, which basically all do the same thing: they regularly monitor your credit scores, looking for changes and odd debts that might be a clue that someone has stolen your identity, and check public record databases to see if your personal information is compromised. Some will prevent pre-approved credit card offers from being sent to your mailbox, patrol the black market internet where thieves buy and sell credit card numbers, and the fancier services will provide lost wallet protection, identity theft insurance and keystroke encryption software.

Which are the best? A research organization called NextAdvisor has recently evaluated and ranked eight of these services with costs ranging from $20 a month down to $7 a month. The top rated was IdentityGuard (premium service price: $19.99 a month) which offers the most complete protection, including the aforementioned fancier services. But seven of the protection systems, including TrustedID, AARP (a white-labeled version of TrustedID), LifeLock Ultimate, PrivacyGuard, IDFreeze and LegalShield all received good ratings; only Experian’s ProtectMyID was negatively reviewed for being expensive and only monitoring one credit reporting service.

Do you really NEED these services? Possibly not. However, with the growing publicity around identity theft, these firms have become very aggressive in their marketing efforts. What they don’t tell you is that you can do many of the things they do on your own. Every quarter, you can review one of your credit bureau reports for free, or—and this is easier—simply look at your statements and balances every day. The more sophisticated services are a fancy replacement for promptly notifying your bank when a credit card is lost or stolen, or when a strange charge shows up because Citibank or the Target department store was using weak security protocols.

In the near future, as more transactions take place using thumb prints or other biometric security data, we may look back on this period as the Wild West of data security, a strange unsettling time when people had to worry about their lives being hacked by strangers. Your goal is to arrive safely, un-hacked, at that more secure period in our cultural evolution.

If you would like to discuss protecting your money and your identity, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fee-only fiduciary financial planning firm that always puts your interests first. If you are not a client yet, an initial consultation is complimentary and there is never any pressure or hidden sales pitch.

Many ask me why I decided to adopt the nick-name TheMoneyGeek. The answer is because I’m such a money nerd and techno geek. Where money and technology intersect, I’m really in my element. Unfortunately, so are creative hackers. They will take any opportunity to separate you from both your computer data as well as your money. So how do you protect yourself? And with Microsoft Defender software available on most new Windows computers, do you really need antivirus software on your home computers?

The short answer is “yes”. The Internet is increasingly awash with creative malware that can severely damage your computer, destroy your files, and embed themselves quietly in your operating system, sending information that can be used by identity thieves, or allowing hackers to turn your computer into a spam machine or “slave”.

Antivirus software companies monitor the Web in real time. They are constantly identifying new strains of malware and providing updates to their software that will look for the “symptoms” of every known virus, isolate it and allow you to remove it before it has a chance to damage your files, send compromising information or invite your friends and neighbors to purchase online porn.

Top10AntiVirusSoftware.com has just released its 2015 list of the most effective programs for preventing worms, trojan horses, viruses or malware from installing themselves on your computer. The top-rated industry leader was McAfee Software, which can be purchased for $24.99 a year. Other top-rated programs include Kaspersky ($29.99), BullGuard ($23.96), BitDefender ($19.95), Norton Antivirus ($59.99), AVG ($31.99) and ESET ($19.99). (You can buy any of the programs at a discount at http://www.top10antivirussoftware.com).

Understand that like all things in the software world, the best program in 2015 may not be the top-rated the following year. And most importantly, recognize that you need to constantly respond to the free upgrades for your software, because some of the most creative programmers in the world are constantly plotting against you and your security. Paid anti-malware and security suites require an annual maintenance fee, though many allow you to install the program on up to five computers in your household.

If you would like to discuss protecting your money and computers, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fee-only fiduciary financial planning firm that always puts your interests first. If you are not a client yet, an initial consultation is complimentary and there is never any pressure or hidden sales pitch.

Among many other things, your U.S. government keeps track of the most popular New Year’s resolutions (you can find them by clicking here), and the list is about what you’d expect. At the top of the list is “lose weight,” followed by, in order of popularity:

Volunteer to help others

Quit smoking

Get a better education

Get a better job

Save money

Get fit

Eat healthy food

Manage stress

Manage debt

Take a trip

Reduce, reuse and recycle

Drink less alcohol

The Journal of Clinical Psychology, using a slightly different methodology, also found that “losing weight” was the number one resolution, followed by “getting organized” and “spend less, save more.” Also on the list: “staying fit and healthy,” “quit smoking” – and a few that were not on the government list: “getting organized,” “enjoy life to the fullest,” “learn something exciting,” “help others in their dreams,” “fall in love,” and “spend more time with family.”

But here’s the interesting part: the Journal found that just 8% of people are successful in achieving one or more of their resolutions in any given year, and 24% of us never succeed in achieving any of our resolutions year after year after year.

Why the high failure rate? Using MRI technology, brain scientists Antonio Damasio and Joseph LeDoux studied what they called habitual behavior – that is, neural pathways and memories that become the default basis for our responses whenever we’re faced with a choice or decision. These defaults, they found, are very difficult to change, and actually can be strengthened by efforts to “not do” things that feel natural or have been longstanding habits.

The lesson: Real change—actually succeeding in our resolutions—requires us to carve out new neural pathways. We need to rewire our brains.

How? Ray Williams, author of “Breaking Bad Habits,” offers a few suggestions that could dramatically raise your odds of success when it comes to resolutions. First, he says, make your resolution specific and realistic. Instead of resolving to “lose weight,” set a goal to lose 10 pounds in 90 days. Then create a daily strategy for making that happen, taking small positive steps rather than expecting a big change to come over you all at once. Many people quit their resolutions because the goals are too big and require steps that are too large—all at once.

Of course, you still have to actually take those individual steps, and it’s easy for them to get lost in the background noise of your daily life. Williams recommends that if you’re truly serious about sticking to your resolutions, recruit an “accountability buddy” who you will have to report to on a regular basis. You’ll find a way to get your resolutions on your own personal priority list, and do these things for someone else because you don’t want to admit that you failed to take the steps you promised to do.

It may also help to keep the goals in front of you—on your computer screen or tacked up in a place where you can see them. This will remind you to ask yourself: what’s the one thing I can do today, right now, towards my goal?

Don’t give up when you slip—and you will. Simply continue working at your goal. And finally: Recognize that creating new neural pathways in your brain is hard work—far more work than simply writing down a resolution. Remember the failure rate, and gird yourself accordingly.

If you would like to discuss your 2015 financial goals or any other financial planning matters, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fee-only fiduciary financial planning firm that always puts your interests first. If you are not a client yet, an initial consultation is complimentary and there is never any pressure or hidden sales pitch.

Looking back on 2014, people are going to say it was a great year to be an investor. They won’t remember how uncertain the journey felt right up to the last day of a year that saw the S&P 500 close at a record level on 53 different days. Think back over a good year in the market. Was there ever a time when you felt confidently bullish that the markets were taking off and delivering double-digit returns? I know I didn’t.

The Wilshire 5000–the broadest measure of U.S. stocks and bonds—finished the year up 13.14%, on the basis of a strong 5.88% return in the final three months of the year. The comparable Russell 3000 index will go into the history books gaining 12.56% in 2014.

The Wilshire U.S. Large Cap index gained 14.62% in 2014, with 6.06% of that coming in the final quarter. The Russell 1000 large-cap index gained 13.24%, while the widely-quoted S&P 500 index of large company stocks posted a gain of 4.39% in the final quarter of the year, to finish up 11.39%. The index completed its sixth consecutive year in positive territory, although this was the second-weakest yearly gain since the 2008 market meltdown.

The Wilshire U.S. Mid-Cap index gained a flat 10% in 2014, with a 5.77% return in the final quarter of the year. The Russell Midcap Index gained 13.22% in 2014.

Small company stocks, as measured by the Wilshire U.S. Small-Cap, gave investors a 7.66% return, all of it (and more) coming from a strong 8.57% gain in the final three months of the year. The comparable Russell 2000 Small-Cap Index was up 4.89% for the year. Meanwhile, the technology-heavy Nasdaq Composite Index gained 14.39% for the year.

While the U.S. economy and markets were delivering double-digit returns, the international markets were more subdued. The broad-based EAFE index of companies in developed economies lost 7.35% in dollar terms in 2014, in large part because European stocks declined 9.55%. Emerging markets stocks of less developed countries, as represented by the EAFE EM index, fared better, but still lost 4.63% for the year. Outside the U.S., the countries that saw the largest stock market rises included Argentina (up 57%), China (up 52%), India (up 29.8%) and Japan (up 7.1%).

Looking over the other investment categories, real estate investments, as measured by the Wilshire U.S. REIT index, was up a robust 33.95% for the year, with 17.03% gains in the final quarter alone. Commodities, as measured by the S&P GSCI index, proved to be an enormous drag on investment portfolios, losing 33.06% of their value, largely because of steep recent drops in gold and oil prices.

Part of the reason that U.S. stocks performed so well when investors seemed to be constantly looking over their shoulders is interest rates—specifically, the fact that interest rates remained stubbornly low, aided, in no small part, by a Federal Reserve that seems determined not to let the markets dictate bond yields until the economy is firmly and definitively on its feet. The Bloomberg U.S. Corporate Bond Index now has an effective yield of 3.13%, giving its investors a windfall return of 7.27% for the year due to falling bond rates. 30-year Treasuries are yielding 2.75%, and 10-year Treasuries currently yield 2.17%. At the low end, 3-month T-bills are still yielding a miniscule 0.04%; 6-month bills are only slightly more generous, at 0.12%.

Normally when the U.S. investment markets have posted six consecutive years of gains, five of them in double-digit territory, you would expect to see a kind of euphoria sweep through the ranks of investors. But for most of 2014, investors in aggregate seemed to vacillate between caution and fear, hanging on every economic and jobs report, paying close attention to the Federal Reserve Board’s pronouncements, seemingly trying to find the bad news in the long, steady economic recovery.

One of the most interesting aspects of 2014—and, indeed, the entire U.S. bull market period since 2009—is that so many people think portfolio diversification was a bad thing for their wealth. When global stocks are down compared with the U.S. markets, U.S. investors tend to look at their statements and wonder why they’re lagging the S&P index that they see on the nightly news. This year, commodity-related investments were also down significantly, producing even more drag during what was otherwise a good investment year.

But that’s the point of diversification: when the year began, none of us knew whether the U.S., Europe, both or neither would finish the year in positive territory. Holding some of each is a prudent strategy, yet the eye inevitably turns to the declining investment which, in hindsight, pulled the overall returns down a bit. At the end of next year, we may be looking at U.S. stocks with the same gimlet eye and feeling grateful that we were invested in global stocks as a way to contain the damage; there’s no way to know in advance. Indeed, we increased our allocations to overseas markets in 2014 as a matter of prudent re-balancing. For 2014, that proved to be a tad early, providing a bit of a headwind.

Is a decline in U.S. stocks likely? One can never predict these things in advance, but the usual recipe for a terrible market year is a period right beforehand when investors finally throw caution to the winds, and those who never joined the bull market run decide it’s time to crash the party. The markets have a habit of punishing overconfidence and latecomers, but we don’t seem to be seeing that quite yet.

What we ARE seeing is kind of boring: a long, slow economic recovery in the U.S., a slow housing recovery, healthy but not spectacular job creation in the U.S., stagnation and fears of another Greek default in Europe, stocks trading at values slightly higher than historical norms and a Fed policy that seems to be waiting for certainty or a sign from above that the recovery will survive a return to normal interest rates.

On the plus side, we also saw a 46% decline in crude oil prices, saving U.S. drivers approximately $14 billion this year. On the minus side, investments in the energy sector during 2014 proved be a downer to portfolios. Oil, like most commodities, tends to be cyclical, and should turn back upward should the rest of the world find its footing and show healthier signs of growth. Should crude continue to slide, we may see collateral damage in the form of lost jobs, shuttered drilling projects and loan defaults by independent, not so well capitalized producers. This would be your classic case of “too much of a good thing.”

The Fed has signaled that it plans to take its foot off of interest rates sometime in the middle of 2015. The questions that nobody can answer are important ones: Will the recovery gain steam and make stocks more valuable in the year ahead? Will Europe stabilize and ultimately recover, raising the value of European stocks? Will oil prices stabilize and remain low, giving a continuing boost to the economy? Or will, contrary to long history, the markets flop without any kind of a euphoric top?

We can’t answer any of these questions, of course. What we do know is that since 1958, the U.S. markets, as measured by the S&P 500 index, have been up 53% of all trading days, 58% of all months, 63% of all quarters and 72% of the years. Over 10-year rolling time periods, the markets have been up 88% of the time. These figures do not include the value of the dividends that investors were paid for hanging onto their stock investments during each of the time periods.

Yet since 1875, the S&P 500 has never risen for seven calendar years in a row. Could 2015 break that streak? Stay tuned.